Edgar Filing: AEGON NV

Form 6-K

Securities and Exchange Commission

Washington, D.C. 20549

Form 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d/16 of

the Securities Exchange Act of 1934

February 2013

AEGON N.V.

AEGONplein 50

2591 TV THE HAGUE

The Netherlands

Aegon’s condensed consolidated interim financial statements Q4 2012, is included as an exhibit and incorporated herein by reference.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		AEGON N.V.
		(Registrant)

Date: February 14, 2013	By	/s/ E. Lagendijk
		E. Lagendijk
		Executive Vice President and General Counsel

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Condensed consolidated

interim financial statements

Q4 2012


aegon.com		The Hague, February 15, 2013

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Table of contents



Condensed consolidated income statement			2

Condensed consolidated statement of comprehensive income			3

Condensed consolidated statement of financial position			4

Condensed consolidated statement of changes in equity			5

Condensed consolidated cash flow statement			6

Notes to the condensed consolidated interim financial statements			7


Unaudited		1

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Condensed consolidated income statement
EUR millions (except per share data)	Notes		Q4 2012			Q4 2011			FY 2012			FY 2011

Premium income		4		4,667			4,437			19,526			19,521
Investment income		5		1,938			2,043			8,501			8,167
Fee and commission income				497			481			1,900			1,465
Other revenues				4			1			10			6
Total revenues				7,106			6,962			29,937			29,159
Income from reinsurance ceded		6		988			892			4,128			2,775
Results from financial transactions		7		2,265			5,873			13,048			(187	)
Other income		8		149			5			151			39
Total income				10,508			13,732			47,264			31,786

Benefits and expenses		9		9,763			13,291			44,660			29,856
Impairment charges / (reversals)		10		69			176			206			483
Interest charges and related fees				94			130			467			491
Other charges		11		34			53			53			69
Total charges				9,960			13,650			45,386			30,899

Share in net result of associates				2			4			26			29
Income before tax				550			86			1,904			916
Income tax (expense) / benefit				(128	)		(5	)		(333	)		(44	)
Net income				422			81			1,571			872

Net income attributable to:
Equity holders of Aegon N.V.				422			79			1,570			869
Non-controlling interests				-			2			1			3

Earnings per share (EUR per share)
Basic earnings per share				0.19			0.02			0.69			(0.06	)
Diluted earnings per share		18		0.19			0.02			0.69			(0.06	)

Earnings per common share calculation
Net income attributable to equity holders of Aegon N.V.				422			79			1,570			869
Preferred dividend				-			-			(59	)		(59	)
Coupons on other equity instruments				(49	)		(45	)		(195	)		(177	)
Coupons and premium on convertible core capital securities				-			-			-			(750	)
Earnings attributable to common shareholders				373			34			1,316			(117	)

Weighted average number of common shares outstanding (in million)				1,943			1,880			1,907			1,852


2		Unaudited

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Condensed consolidated statement of comprehensive income
EUR millions	Q4 2012			Q4 2011			FY 2012			FY 2011

Net income		422			81			1,571			872

Other comprehensive income:
Gains / (losses) on revaluation of available-for-sale investments		593			1,265			4,221			3,113
(Gains) / losses transferred to the income statement on disposal and impairment of available-for-sale investments		(166	)		(175	)		(465	)		(513	)
Changes in revaluation reserve real estate held for own use		(8	)		-			(5	)		3
Changes in cash flow hedging reserve		(127	)		151			(92	)		1,058
Movement in foreign currency translation and net foreign investment hedging reserve		(457	)		550			(116	)		409
Equity movements of associates		-			(10	)		22			(18	)
Aggregate tax effect of items recognized in other comprehensive income		(82	)		(377	)		(1,063	)		(1,167	)
Other		1			-			(1	)		4
Other comprehensive income for the period		(246	)		1,404			2,501			2,889
Total comprehensive income		176			1,485			4,072			3,761

Total comprehensive income attributable to:
Equity holders of Aegon N.V.		177			1,483			4,073			3,758
Non-controlling interests		(1	)		2			(1	)		3


Unaudited		3

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Condensed consolidated statement of financial position
		Dec. 31, 2012		Dec. 31, 2011
EUR millions	Notes

ASSETS
Intangible assets	12		2,948		3,285
Investments	13		146,234		144,079
Investments for account of policyholders	14		153,670		142,529
Derivatives	15		21,154		15,504
Investments in associates			829		742
Reinsurance assets			11,987		11,517
Deferred expenses and rebates	16		11,687		11,432
Other assets and receivables			7,956		8,184
Cash and cash equivalents			9,653		8,104
Total assets			366,118		345,376

EQUITY AND LIABILITIES
Shareholders’ equity			24,669		21,000
Other equity instruments	19		5,018		4,720
Issued capital and reserves attributable to equity holders of Aegon N.V.			29,687		25,720
Non-controlling interests			13		14
Group equity			29,700		25,734

Trust pass-through securities			155		159
Subordinated borrowings	20		61		18
Insurance contracts			105,209		104,974
Insurance contracts for account of policyholders			76,871		73,425
Investment contracts			17,768		20,847
Investment contracts for account of policyholders			78,418		71,433
Derivatives	15		17,848		12,728
Borrowings	21		12,758		10,141
Other liabilities			27,330		25,917
Total liabilities			336,418		319,642
Total equity and liabilities			366,118		345,376


4		Unaudited

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Condensed consolidated statement of changes in equity
EUR millions	Share capital¹		Retained earnings			Revaluation reserves			Other reserves			Convertible core capital securities			Other equity instruments		Issued capital and reserves²			Non- controlling interests			Total

Full year ended December 31, 2012

At beginning of year		9,097		9,403			3,464			(964	)		-			4,720		25,720			14			25,734

Net income recognized in the income statement		-		1,570			-			-			-			-		1,570			1			1,571

Other comprehensive income:
Gains / (losses) on revaluation of available-for-sale investments		-		-			4,221			-			-			-		4,221			-			4,221
(Gains) / losses transferred to income statement on disposal and impairment of available-for-sale investments		-		-			(465	)		-			-			-		(465	)		-			(465	)
Changes in revaluation reserve real estate held for own use		-		-			(5	)		-			-			-		(5	)		-			(5	)
Changes in cash flow hedging reserve		-		-			(92	)		-			-			-		(92	)		-			(92	)
Movement in foreign currency translation and net foreign investment hedging reserves		-		-			-			(116	)		-			-		(116	)		-			(116	)
Equity movements of associates		-		-			-			22			-			-		22			-			22
Aggregate tax effect of items recognized in other comprehensive income		-		(6	)		(1,060	)		3			-			-		(1,063	)		-			(1,063	)
Transfer from / to other headings		-		(19	)		19			-			-			-		-			-			-
Other		-		1			-			-			-			-		1			(2	)		(1	)
Total other comprehensive income		-		(24	)		2,618			(91	)		-			-		2,503			(2	)		2,501
Total comprehensive income/ (loss) for 2012		-		1,546			2,618			(91	)		-			-		4,073			(1	)		4,072

Shares issued		2		-			-			-			-			-		2			-			2
Treasury shares		-		3			-			-			-			-		3			-			3
Dividends paid on common shares		-		(148	)		-			-			-			-		(148	)		-			(148	)
Preferred dividend		-		(59	)		-			-			-			-		(59	)		-			(59	)
Dividend withholding tax reduction		-		3			-			-			-			-		3			-			3
Issuance of non-cumulative subordinated loans		-		-			-			-			-			271		271			-			271
Coupons on non-cumulative subordinated notes		-		(23	)		-			-			-			-		(23	)		-			(23	)
Cost of issuance of non-cumulative subordinated notes (net of tax)		-		(10	)		-			-			-			-		(10	)		-			(10	)
Coupons on perpetual securities		-		(172	)		-			-			-			-		(172	)		-			(172	)
Share options and incentive plans		-		-			-			-			-			27		27			-			27
At end of period		9,099		10,543			6,082			(1,055	)		-			5,018		29,687			13			29,700

Full year ended December 31, 2011

At beginning of year		8,184		9,529			958			(1,343	)		1,500			4,704		23,532			11			23,543

Net income recognized in the income statement		-		869			-			-			-			-		869			3			872

Other comprehensive income:
Gains / (losses) on revaluation of available-for-sale investments		-		-			3,113			-			-			-		3,113			-			3,113
(Gains) / losses transferred to income statement on disposal and impairment of available-for-sale investments		-		-			(513	)		-			-			-		(513	)		-			(513	)
Changes in revaluation reserve real estate held for own use		-		-			3			-			-			-		3			-			3
Changes in cash flow hedging reserve		-		-			1,058			-			-			-		1,058			-			1,058
Movement in foreign currency translation and net foreign investment hedging reserves		-		-			-			409			-			-		409			-			409
Equity movements of associates		-		-			-			(18	)		-			-		(18	)		-			(18	)
Aggregate tax effect of items recognized in other comprehensive income		-		-			(1,155	)		(12	)		-			-		(1,167	)		-			(1,167	)
Other		-		4			-			-			-			-		4			-			4
Total other comprehensive income		-		4			2,506			379			-			-		2,889			-			2,889
Total comprehensive income / (loss) for 2011		-		873			2,506			379			-			-		3,758			3			3,761

Shares issued		913		-			-			-			-			-		913			-			913
Cost of issuance of shares (net of tax)		-		(13	)		-			-			-			-		(13	)		-			(13	)
Preferred dividend		-		(59	)		-			-			-			-		(59	)		-			(59	)
Coupons on perpetual securities		-		(177	)		-			-			-			-		(177	)		-			(177	)
Repurchase of convertible core capital securities		-		-			-			-			(1,500	)		-		(1,500	)		-			(1,500	)
Coupons and premium on convertible core capital securities		-		(750	)		-			-			-			-		(750	)		-			(750	)
Share options and incentive plans		-		-			-			-			-			16		16			-			16
At end of period		9,097		9,403			3,464			(964	)		-			4,720		25,720			14			25,734

¹For a breakdown of share capital please refer to note 18.

²Issued capital and reserves attributable to equity holders of Aegon N.V.


Unaudited		5

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Condensed consolidated cash flow statement
EUR millions	FY 2012			FY 2011

Cash flow from operating activities		(966	)		2,266

Purchases and disposals of intangible assets		(37	)		(17	)
Purchases and disposals of equipment and other assets		(49	)		(54	)
Purchases, disposals and dividends of subsidiaries and associates		157			724
Cash flow from investing activities		71			653

Issuance of share capital		2			913
Dividends paid		(207	)		(59	)
Issuances, repurchases and coupons of convertible core capital securities		-			(2,250	)
Issuances, repurchases and coupons of perpetuals		(230	)		(237	)
Issuances, repurchases and coupons of non cumulative subordinated notes		241			-
Issuances and repayments of borrowings		2,796			1,259
Cash flow from financing activities		2,602			(374	)

Net increase / (decrease) in cash and cash equivalents		1,707			2,545
Net cash and cash equivalents at January 1		7,826			5,174
Effects of changes in foreign exchange rates		27			107
Net cash and cash equivalents at end of period		9,560			7,826

	Dec. 31, 2012			Dec. 31, 2011
Cash and cash equivalents		9,653			8,104
Bank overdrafts		(93	)		(278	)
Net cash and cash equivalents		9,560			7,826


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Notes to the condensed consolidated interim financial statements

Amounts in EUR millions, unless otherwise stated

Aegon N.V., incorporated and domiciled in the Netherlands, is a public limited liability company organized under Dutch law and recorded in the Commercial Register of The Hague under its registered address at Aegonplein 50, 2591 TV, The Hague, the Netherlands. Aegon N.V. serves as the holding company for the Aegon Group and has listings of its common shares in Amsterdam and New York.

Aegon N.V. (or “the Company”), its subsidiaries and its proportionally consolidated joint ventures (“Aegon” or “the Group”) have life insurance and pensions operations in over twenty countries in the Americas, Europe and Asia and are also active in savings and asset management operations, accident and health insurance, general insurance and to a limit extent banking operations. Headquarters are located in The Hague, the Netherlands. The Group employs approximately 24,500 people worldwide (2011: 25,000).

1. Basis of presentation

The condensed consolidated interim financial statements are no longer prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), as Aegon applies fair value hedge accounting for portfolio hedges of interest rate risk (macro hedging) under the EU ‘carve out’ of IFRS as adopted by the EU (IFRS-EU). The methodology for fair value hedge accounting under the EU ‘carve out’ is not allowed by IFRS as issued by the IASB. This change in basis of presentation has to be applied retrospectively, however as Aegon started to use macro hedging under the EU ‘carve out’ as of October 1, 2012 no adjustments to the comparative information have been made. If Aegon would not have applied the EU ‘carve out’ for its macro fair value hedge accounting, net income of 2012 and shareholders’ equity per December 31, 2012 would have been EUR 39 million lower.

The condensed consolidated interim financial statements as at, and for the fourth quarter ended, December 31, 2012, have been prepared in accordance with IAS 34 ‘Interim financial reporting’, as adopted by the European Union (EU). They do not include all of the information required for a full set of financial statements prepared in accordance with IFRS-EU and should therefore be read together with the 2011 consolidated financial statements of Aegon N.V. as included in Aegon’s Annual Report for 2011. Aegon’s Annual Report for 2011 is available on its website (aegon.com).

The condensed consolidated interim financial statements have been prepared in accordance with the historical cost convention as modified by the revaluation of investment properties and those financial instruments (including derivatives) and financial liabilities that have been measured at fair value. The condensed consolidated interim financial statements as at, and for the fourth quarter ended December 31, 2012, were approved by the Executive Board on February 14, 2013.

The published figures in these condensed consolidated interim financial statements are unaudited.

2. Significant accounting policies

All accounting policies and methods of computation applied in the condensed consolidated interim financial statements are the same as those applied in the 2011 consolidated financial statements, except for the policy of fair value hedge accounting and the policy for compound instruments:


Unaudited		7

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Fair value hedge accounting

Aegon applies fair value hedge accounting to portfolio hedges of interest rate risk (fair value macro hedging) under the EU ‘carve out’ of IFRS-EU. The EU ‘carve out’ macro hedging enables a group of derivatives (or proportions thereof) to be viewed in combination and jointly designated as the hedging instrument and removes some of the limitations in fair value hedge accounting. Under the IFRS-EU ‘carve out’, ineffectiveness in fair value hedge accounting only arises when the revised estimate of the amount of cash flows in scheduled time buckets falls below the designated amount of that bucket. Aegon applies fair value hedge accounting for portfolio hedges of interest rate risk (macro hedging) under the EU ‘carve out’ to mortgage loans. The hedging activities are designated under a portfolio fair value hedge on these mortgage loans. Changes in the fair value of the derivatives are recognized in the profit and loss account, together with the fair value adjustment on the mortgages (hedged items) insofar as attributable to interest rate risk (the hedged risk).

Non-cumulative subordinated notes

Non-cumulative subordinated notes are identified as a compound instrument due to the nature of this financial instrument. For these non-cumulative subordinated notes Aegon has an unconditional right to avoid delivering cash or another financial asset to settle the coupon payments. The redemption of the principal is however not at the discretion of Aegon and therefore Aegon has a contractual obligation to settle the redemption in cash or another financial asset or through the exchange of financial assets and liabilities at potentially unfavorable conditions for Aegon. Compound instruments are separated into liability components and equity components. The liability component for the non-cumulative subordinated notes is equal to the present value of the redemption amount and carried at amortized cost using the effective interest rate method. The liability component is derecognized when the Group’s obligation under the contract expires, is discharged or is cancelled. The equity component is assigned the residual amount after deducting the liability component from the fair value of the instrument as a whole.

Incremental external costs that are directly attributable to the issuing or buying back of the non-cumulative subordinated notes are recognized in either equity or income statement proportionately to the equity component and liability component, net of tax.

Coupon payments and other distributions to holders of the non-cumulative subordinated notes are recognized directly in equity, net of tax. A liability for non-cumulative dividends payable is not recognized until the coupon has been declared and approved.

New IFRS accounting standards effective

The following standards, interpretations, amendments to standards and interpretations became effective in 2012:

Amendment to IFRS 1 First time adoption – Severe Hyperinflation and Removal of Fixed Dates for First Time Adopters.

Amendment to IFRS 7 Disclosures – Transfers of Financial Assets.

IAS 12 Income Taxes – Recovery of Tax Assets.

None of these new or revised standards and interpretations had a significant effect on the condensed consolidated interim financial statements for the period ended December 31, 2012.

Future adoption of new IFRS accounting standards

In June 2011, the revised standard IAS 19 Employee Benefits was issued. The amended standard applies to financial years beginning on, or after, January 1, 2013. The amendments eliminate the option to defer the recognition of actuarial gains and losses, known as the “corridor method”. The amendments streamline the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring actuarial gains and losses to be presented in other comprehensive income. The revised standard also requires the expected return on plan assets to be replaced by the discount rate used to determine the defined benefit liability. The discount rate shall be determined by reference to market yields at the end of the reporting period on high quality corporate bonds. And, furthermore, the revised standard enhances the disclosure requirements for defined benefit plans, providing information about the characteristics of defined benefit plans and the risks that entities are exposed to through participation in those plans.


8		Unaudited

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As per December 31, 2012, Aegon estimates the adverse impact on equity of removing the corridor to be approximately EUR 1.0 billion (post tax), consisting of the unrecognized actuarial gains and losses as per that date. The improvement compared to the estimated impact as at September 30, 2012 of EUR 1.4 billion (post tax) is largely attributable to higher discount rates, improved return on plan assets and changes to indexation. However, Aegon did not yet finish the analysis of the financial impact of the revised standard, therefore the actual impact could change upon completion of the analysis. Aegon does not expect any changes in the classification of the employee plans resulting from the revised standard.

For a complete overview of IFRS standards, published before January 1, 2012, that will be applied in future years, but were not early adopted by the Group, refer to Aegon’s Annual Report for 2011.

Taxes

Taxes on income for the Q4 2012 interim period are accrued using the tax rate that would be applicable to expected total annual earnings.

Judgments and critical accounting estimates

Preparing the condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions, including the likelihood, timing or amount of future transactions or events, that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from the estimates made.

In preparing the condensed consolidated interim financial statements, significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended December 31, 2011.

Exchange rates

Assets and liabilities are translated at the closing rates on the balance sheet date. Income, expenses and capital transactions (such as dividends) are translated at average exchange rates or at the prevailing rates on the transaction date, if more appropriate. The following exchange rates are applied for the condensed consolidated interim financial statements:

Closing exchange rates


			USD	GBP
December 31, 2012	1	EUR	1.3184	0.8111
December 31, 2011	1	EUR	1.2982	0.8353

Weighted average exchange rates


			USD	GBP
2012	1	EUR	1.2849	0.8103
2011	1	EUR	1.3909	0.8667


Unaudited		9

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3. Segment information

3.1 Income statement


EUR millions	Americas			The Netherlands			United Kingdom			New Markets			Holding and other activities			Eliminations			Segment Total			Associates eliminations			Consolidated
*Three months ended December 31, 2012*

Underlying earnings before tax geographically		342			83			25			52			(53	)		(2	)		447			(2	)		445
Fair value items		(16	)		6			(11	)		5			(63	)		-			(79	)		-			(79	)
Realized gains / (losses) on investments		43			70			36			-			-			-			149			-			149
Impairment charges		(44	)		(18	)		-			(17	)		-			-			(79	)		1			(78	)
Impairment reversals		13			8			-			-			-			-			21			-			21
Other income / (charges)		(25	)		(7	)		-			139			(1	)		-			106			-			106
Run-off businesses		(14	)		-			-			-			-			-			(14	)		-			(14	)
Income before tax		299			142			50			179			(117	)		(2	)		551			(1	)		550
Income tax (expense) / benefit		(60	)		(26	)		(13	)		(53	)		23			-			(129	)		1			(128	)
Net income		239			116			37			126			(94	)		(2	)		422			-			422
Inter-segment underlying earnings		(49	)		(13	)		(15	)		71			6

Revenues
Life insurance gross premiums		1,702			417			1,615			326			-			(21	)		4,039			(40	)		3,999
Accident and health insurance		457			34			-			41			2			(2	)		532			-			532
General insurance		-			100			-			36			-			-			136			-			136
Total gross premiums		2,159			551			1,615			403			2			(23	)		4,707			(40	)		4,667
Investment income		907			546			420			65			95			(93	)		1,940			(2	)		1,938
Fee and commission income		316			84			30			129			-			(62	)		497			-			497
Other revenues		2			-			-			1			1			-			4			-			4
Total revenues		3,384			1,181			2,065			598			98			(178	)		7,148			(42	)		7,106
Inter-segment revenues		8			1			-			77			92


EUR millions	Americas			The Netherlands			United Kingdom			New Markets			Holding and other activities			Eliminations			Segment Total			Associates eliminations			Consolidated
*Three months ended December 31, 2011*

Underlying earnings before tax geographically		316			75			(26	)		65			(84	)		-			346			(4	)		342
Fair value items		(139	)		189			3			(10	)		(63	)		-			(20	)		-			(20	)
Realized gains / (losses) on investments		6			33			8			2			-			-			49			-			49
Impairment charges		(70	)		(5	)		-			(25	)		-			1			(99	)		2			(97	)
Impairment reversals		6			-			-			-			-			(1	)		5			-			5
Other income / (charges)		(36	)		(84	)		(57	)		1			(18	)		-			(194	)		-			(194	)
Run-off businesses		1			-			-			-			-			-			1			-			1
Income before tax		84			208			(72	)		33			(165	)		-			88			(2	)		86
Income tax (expense) / benefit		9			(60	)		(16	)		(10	)		70			-			(7	)		2			(5	)
Net income		93			148			(88	)		23			(95	)		-			81			-			81
Inter-segment underlying earnings		(42	)		(62	)		(16	)		66			54

Revenues
Life insurance gross premiums		1,571			379			1,490			452			-			(16	)		3,876			(71	)		3,805
Accident and health insurance		434			30			-			40			-			-			504			1			505
General insurance		-			94			-			33			-			-			127			-			127
Total gross premiums		2,005			503			1,490			525			-			(16	)		4,507			(70	)		4,437
Investment income		891			597			488			83			135			(133	)		2,061			(17	)		2,044
Fee and commission income		311			78			29			121			-			(59	)		480			-			480
Other revenues		-			-			-			(1	)		2			-			1			-			1
Total revenues		3,207			1,178			2,007			728			137			(208	)		7,049			(87	)		6,962
Inter-segment revenues		7			1			-			69			131

As of the first quarter of 2012, Aegon has revised its financial reporting to reflect changes in its organization. Businesses in Asia, which were previously managed by Aegon Americas, are included in the Asia line of business within the “New Markets” segment. For the full year 2011, the underlying earnings before tax generated by the Asian operations totaling EUR 37 million were previously reported under the “Americas” segment.


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EUR millions	Americas			The Netherlands			United Kingdom			New Markets			Holding and other activities			Eliminations			Segment Total			Associates eliminations			Consolidated
*Full year ended December 31, 2012*

Underlying earnings before tax geographically		1,317			315			105			274			(220	)		(4	)		1,787			(7	)		1,780
Fair value items		(76	)		164			(31	)		(1	)		(4	)		-			52			-			52
Realized gains / (losses) on investments		175			138			84			10			-			-			407			-			407
Impairment charges		(181	)		(37	)		-			(26	)		(4	)		2			(246	)		1			(245	)
Impairment reversals		64			8			-			-			-			(2	)		70			-			70
Other income / (charges)		(28	)		(279	)		34			113			(2	)		-			(162	)		-			(162	)
Run-off businesses		2			-			-			-			-			-			2			-			2
Income before tax		1,273			309			192			370			(230	)		(4	)		1,910			(6	)		1,904
Income tax (expense) / benefit		(248	)		(18	)		(23	)		(121	)		71			-			(339	)		6			(333	)
Net income		1,025			291			169			249			(159	)		(4	)		1,571			-			1,571
Inter-segment underlying earnings		(191	)		(60	)		(62	)		286			27

Revenues
Life insurance gross premiums		6,541			3,004			6,047			1,374			-			(73	)		16,893			(227	)		16,666
Accident and health insurance		1,833			220			-			188			5			(5	)		2,241			-			2,241
General insurance		-			475			-			144			-			-			619			-			619
Total gross premiums		8,374			3,699			6,047			1,706			5			(78	)		19,753			(227	)		19,526
Investment income		3,654			2,212			2,337			319			374			(374	)		8,522			(21	)		8,501
Fee and commission income		1,177			329			133			524			-			(263	)		1,900			-			1,900
Other revenues		5			-			-			3			5			-			13			(3	)		10
Total revenues		13,210			6,240			8,517			2,552			384			(715	)		30,188			(251	)		29,937
Inter-segment revenues		31			2			1			310			371


EUR millions	Americas			The Netherlands			United Kingdom			New Markets			Holding and other activities			Eliminations			Segment Total			Associates eliminations			Consolidated
*Full year ended December 31, 2011*

Underlying earnings before tax geographically		1,273			298			5			249			(306	)		3			1,522			(13	)		1,509
Fair value items		(477	)		156			(6	)		(30	)		(59	)		-			(416	)		-			(416	)
Realized gains / (losses) on investments		119			269			51			7			-			-			446			-			446
Impairment charges		(306	)		(16	)		(62	)		(61	)		-			1			(444	)		4			(440	)
Impairment reversals		56			1			-			-			-			(1	)		56			-			56
Other income / (charges)		(35	)		(164	)		(57	)		7			(18	)		-			(267	)		-			(267	)
Run-off businesses		28			-			-			-			-			-			28			-			28
Income before tax		658			544			(69	)		172			(383	)		3			925			(9	)		916
Income tax (expense) / benefit		(15	)		(125	)		17			(61	)		131			-			(53	)		9			(44	)
Net income		643			419			(52	)		111			(252	)		3			872			-			872
Inter-segment underlying earnings		(157	)		(105	)		(68	)		257			73

Revenues
Life insurance gross premiums		6,004			3,213			6,474			1,600			-			(55	)		17,236			(383	)		16,853
Accident and health insurance		1,672			216			-			179			-			-			2,067			-			2,067
General insurance		-			452			-			149			-			-			601			-			601
Total gross premiums		7,676			3,881			6,474			1,928			-			(55	)		19,904			(383	)		19,521
Investment income		3,565			2,192			2,154			320			392			(385	)		8,238			(70	)		8,168
Fee and commission income		766			329			137			469			-			(237	)		1,464			-			1,464
Other revenues		1			-			-			1			4			-			6			-			6
Total revenues		12,008			6,402			8,765			2,718			396			(677	)		29,612			(453	)		29,159
Inter-segment revenues		28			2			2			270			375


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Non-IFRS measures

For segment reporting purposes the following non-IFRS financial measures are included: underlying earnings before tax, income tax (including associated companies) and income before tax (including associated companies). These non-IFRS measures are calculated by consolidating on a proportionate basis the revenues and expenses of Aegon’s associated companies in Spain, India, Brazil and Mexico. Aegon believes that its non-IFRS measures provide meaningful information about the underlying operating results of Aegon’s business, including insight into the financial measures that Aegon’s senior management uses in managing the business.

Among other things, Aegon’s senior management is compensated based in part on Aegon’s results against targets using the non-IFRS measures presented here. While many other insurers in Aegon’s peer group present substantially similar non-IFRS measures, the non-IFRS measures presented in this document may nevertheless differ from the non-IFRS measures presented by other insurers. There is no standardized meaning to these measures under IFRS or any other recognized set of accounting standards and readers are cautioned to consider carefully the different ways in which Aegon and its peers present similar information before comparing them.

Aegon believes the non-IFRS measure shown herein, when read together with Aegon’s reported IFRS financial statements, provides meaningful supplemental information for the investing public to evaluate Aegon’s business after eliminating the impact of current IFRS accounting policies for financial instruments and insurance contracts, which embed a number of accounting policy alternatives that companies may select in presenting their results (i.e. companies can use different local GAAPs to measure the insurance contract liability) and that can make the comparability from period to period difficult.

The reconciliation from underlying earnings before tax to income before tax, being the most comparable IFRS measure, is presented in the tables in this note.

Underlying earnings

Certain assets held by Aegon Americas, Aegon The Netherlands and Aegon United Kingdom are carried at fair value and managed on a total return basis, with no offsetting changes in the valuation of related liabilities. These include assets such as investments in hedge funds, private equities, real estate limited partnerships, convertible bonds and structured products. Underlying earnings exclude any over- or underperformance compared to management’s long-term expected return on assets.

Based on current holdings and asset returns, the long-term expected return on an annual basis is 8-10%, depending on asset class, including cash income and market value changes. The expected earnings from these asset classes are net of deferred policy acquisition costs (DPAC) where applicable.

In addition, certain products offered by Aegon Americas contain guarantees and are reported on a fair value basis, including the segregated funds offered by Aegon Canada and the total return annuities and guarantees on variable annuities of Aegon USA. The earnings on these products are impacted by movements in equity markets and risk-free interest rates. Short-term developments in the financial markets may therefore cause volatility in earnings. Included in underlying earnings is a long-term expected return on these products and excluded is any over- or underperformance compared to management’s expected return. The fair value movements of certain guarantees and the fair value change of derivatives that hedge certain risks on these guarantees of Aegon The Netherlands and Variable Annuities Europe (included in New Markets) are excluded from underlying earnings, and the long-term expected return for these guarantees is set at zero.

Holding and other activities include certain issued bonds that are held at fair value through profit or loss (FVTPL). The interest rate risk on these bonds is hedged using swaps. The fair value movement resulting from changes in Aegon’s credit spread used in the valuation of these bonds are excluded from underlying earnings and reported under fair value items.


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Fair value items

Fair value items include the over- or underperformance of investments and guarantees held at fair value for which the expected long-term return is included in underlying earnings. Changes to these long-term return assumptions are also included in the fair value items.

In addition, hedge ineffectiveness on hedge transactions, fair value changes on economic hedges without natural offset in earnings and for which no hedge accounting is applied and fair value movements on real estate are included under fair value items.

Realized gains or losses on investments

Includes realized gains and losses on available-for-sale investments, mortgage loans and other loan portfolios.

Impairment charges / reversals

Includes impairments and reversals on available-for-sale debt securities and impairments on shares including the effect of deferred policyholder acquisition costs, mortgage loans and loan portfolios on amortized cost and associates respectively.

Other income or charges

Other income or charges is used to report any items which cannot be directly allocated to a specific line of business. Also items that are outside the normal course of business are reported under this heading.

Other charges include restructuring charges that are considered other charges for segment reporting purposes because they are outside the normal course of business. In the condensed consolidated income statement, these charges are included in operating expenses.

Run-off businesses

Includes underlying results of business units where management has decided to exit the market and to run off the existing block of business. Currently, this line includes the run-off of the institutional spread-based business, structured settlements blocks of business, Bank-Owned and Corporate-Owned Life Insurance (BOLI/COLI) business and life reinsurance business in the United States. Aegon has other blocks of business for which sales have been discontinued and of which the earnings are included in underlying earnings.

Share in earnings of associates

Earnings from Aegon’s associates in insurance companies in Spain, India, Brazil and Mexico are reported on an underlying earnings basis. Other associates are included on a net income basis.


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3.2 Investments geographically


									amounts in million EUR (unless otherwise stated)
Americas USD		United Kingdom GBP		At December 31, 2012	Americas		The Netherlands		United Kingdom		New Markets		Holding & other activities		Eliminations			Total EUR
				Investments
	1,833		42	Shares		1,390		412		51		48		-		(2	)		1,899
	83,964		8,975	Debt securities		63,686		19,256		11,066		4,000		-		-			98,008
	11,748		4	Loans		8,910		21,024		5		693		-		-			30,632
	15,434		175	Other financial assets		11,707		286		216		48		759		-			13,016
	1,009		-	Investments in real estate		766		1,912		-		1		-		-			2,679
	113,988		9,196	Investments general account		86,459		42,890		11,338		4,790		759		(2	)		146,234
	-		23,017	Shares		-		8,406		28,378		3,720		-		(6	)		40,498
	-		10,542	Debt securities		-		16,266		12,997		430		-		-			29,693
	86,975		8,192	Separate accounts and investment funds		65,970		-		10,099		1,259		-		-			77,328
	-		2,761	Other financial assets		-		422		3,404		1,317		-		-			5,143
	-		817	Investments in real estate		-		-		1,008		-		-		-			1,008
	86,975		45,329	Investments for account of policyholders		65,970		25,094		55,886		6,726		-		(6	)		153,670

	200,963		54,525	Investments on balance sheet		152,429		67,984		67,224		11,516		759		(8	)		299,904
	132,796		8	Off balance sheet investments third parties		100,725		-		10		57,217		-		-			157,952
	333,759		54,533	Total revenue generating investments		253,154		67,984		67,234		68,733		759		(8	)		457,856

				Investments
	95,282		9,155	Available-for-sale		72,271		19,717		11,287		3,808		19		-			107,102
	11,748		4	Loans		8,910		21,024		5		693		-		-			30,632
	-		-	Held-to-maturity		-		-		-		189		-		-			189
	92,924		44,549	Financial assets at fair value through profit or loss		70,482		25,331		54,924		6,825		740		(8	)		158,294
	1,009		817	Investments in real estate		766		1,912		1,008		1		-		-			3,687
	200,963		54,525	Total investments on balance sheet		152,429		67,984		67,224		11,516		759		(8	)		299,904

	119		6	Investments in associates		90		79		8		648		4		-			829
	33,969		5,098	Other assets		25,765		27,487		6,284		3,992		39,106		(37,249	)		65,385
	235,051		59,629	Consolidated total assets		178,284		95,550		73,516		16,156		39,869		(37,257	)		366,118


									amounts in million EUR (unless otherwise stated)
Americas USD		United Kingdom GBP		At December 31, 2011	Americas		The Netherlands		United Kingdom		New Markets		Holding & other activities		Eliminations			Total EUR
				Investments
	1,570		45	Shares		1,209		505		54		60		11		(2	)		1,837
	84,192		8,261	Debt securities		64,853		17,640		9,890		4,036		-		-			96,419
	13,319		7	Loans		10,260		18,825		8		643		-		-			29,736
	16,196		-	Other financial assets		12,476		40		-		43		744		-			13,303
	1,006		-	Investments in real estate		775		2,009		-		-		-		-			2,784
	116,283		8,313	Investments general account		89,573		39,019		9,952		4,782		755		(2	)		144,079
	-		21,755	Shares		-		7,608		26,045		3,459		-		(4	)		37,108
	-		10,003	Debt securities		-		15,124		11,975		277		-		-			27,376
	80,137		7,095	Separate accounts and investment funds		61,729		-		8,495		1,060		-		-			71,284
	-		2,940	Other financial assets		-		491		3,519		1,619		-		-			5,629
	-		946	Investments in real estate		-		-		1,132		-		-		-			1,132
	80,137		42,739	Investments for account of policyholders		61,729		23,223		51,166		6,415		-		(4	)		142,529

	196,420		51,052	Investments on balance sheet		151,302		62,242		61,118		11,197		755		(6	)		286,608
	119,371		-	Off balance sheet investments third parties		91,951		-		-		44,959		-		-			136,910
	315,791		51,052	Total revenue generating investments		243,253		62,242		61,118		56,156		755		(6	)		423,518

				Investments
	96,145		8,266	Available-for-sale		74,060		18,016		9,896		3,861		27		-			105,860
	13,319		7	Loans		10,260		18,825		8		643		-		-			29,736
	-		-	Held-to-maturity		-		-		-		168		-		-			168
	85,950		41,833	Financial assets at fair value through profit or loss		66,207		23,392		50,082		6,525		728		(6	)		146,928
	1,006		946	Investments in real estate		775		2,009		1,132		-		-		-			3,916
	196,420		51,052	Total investments on balance sheet		151,302		62,242		61,118		11,197		755		(6	)		286,608

	100		7	Investments in associates		77		52		9		600		4		-			742
	33,562		5,919	Other assets		25,852		19,202		7,086		3,789		35,878		(33,781	)		58,026
	230,082		56,978	Consolidated total assets		177,231		81,496		68,213		15,586		36,637		(33,787	)		345,376


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4. Premium income and premium to reinsurers



EUR millions	Q4 2012	Q4 2011	FY 2012	FY 2011

Gross
Life	3,999	3,805	16,666	16,853
Non-Life	668	632	2,860	2,668
Total	4,667	4,437	19,526	19,521

Reinsurance
Life	866	891	3,324	3,042
Non-Life	99	93	411	365
Total	965	984	3,735	3,407

5. Investment income



EUR millions	Q4 2012	Q4 2011	FY 2012	FY 2011

Interest income	1,717	1,818	7,367	7,256
Dividend income	187	186	983	745
Rental income	34	39	151	166
Total investment income	1,938	2,043	8,501	8,167

Investment income related to general account	1,465	1,494	5,956	5,823
Investment income for account of policyholders	473	549	2,545	2,344
Total	1,938	2,043	8,501	8,167

6. Income from reinsurance ceded

The increase in Income from reinsurance ceded in 2012 compared to 2011 is mainly the result of the increased income from external reinsurance following the divestment of the life reinsurance business, Transamerica Reinsurance, to SCOR, completed on August 9, 2011.

7. Results from financial transactions



EUR millions	Q4 2012		Q4 2011		FY 2012		FY 2011

Net fair value change of general account financial investments at FVTPL other than derivatives	68		18		419		44
Realized gains and (losses) on financial investments	164		222		549		803
Gains and (losses) on investments in real estate	30		(13	)	(53	)	(49	)
Net fair value change of derivatives	91		259		355		1,165
Net fair value change on for account of policyholder financial assets at FVTPL	1,938		5,401		11,855		(2,133	)
Net fair value change on investments in real estate for account of policyholders	(15	)	7		(46	)	20
Net foreign currency gains and (losses)	(5	)	(6	)	10		(17	)
Net fair value change on borrowings and other financial liabilities	(7	)	(15	)	(48	)	(24	)
Realized gains and (losses) on repurchased debt	1		-		7		4
Total	2,265		5,873		13,048		(187	)

Net fair value changes on for account of policyholder financial assets at fair value through profit or loss are offset by amounts in Claims and benefits reported in the Benefits and expenses line (note 9).

8. Other income

Other income 2012 mainly includes the gain on the sale of our interest in Prisma Capital Partners LP (“Prisma”) of EUR 100 million and the gain following the ending of the life, health and pension partnership with Banca Cívica of EUR 35 million. For more details on these two transactions refer to Note 23 Acquisitions / Divestments. For 2011 other income mainly reflected a benefit related to a settlement of a legal claim.


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9. Benefits and expenses



EUR millions	Q4 2012		Q4 2011		FY 2012		FY 2011

Claims and benefits	8,966		12,322		41,711		26,358
Employee expenses	555		502		2,092		2,069
Administration expenses	282		355		1,096		1,315
Deferred expenses	(425	)	(353	)	(1,538	)	(1,458	)
Amortization charges	385		465		1,299		1,572
Total	9,763		13,291		44,660		29,856

Claims and benefits reflects the claims and benefits paid to policyholders, including claims and benefits in excess of account value for products for which deposit accounting is applied and the change in valuation of liabilities for insurance and investment contracts. In addition, Claims and benefits includes commissions and expenses, as well as premium paid to reinsurers. Claims and benefits fluctuates mainly as a result of changes in technical provisions resulting from fair value changes on for account of policyholder financial assets included in Results from financial transactions (note 7).

In Q2 2012, Aegon The Netherlands increased the technical provisions related to unit-linked insurance policies with EUR 265 million. This addition to the technical provisions is included in Claims and benefits. Refer to note 22 Commitments and contingencies for more details.

10. Impairment charges / (reversals)



EUR millions	Q4 2012		Q4 2011		FY 2012		FY 2011

Impairment charges / (reversals) comprise:
Impairment charges on financial assets, excluding receivables ¹	72		107		250		461
Impairment reversals on financial assets, excluding receivables ¹	(22	)	(4	)	(70	)	(55	)
Impairment charges / (reversals) on non-financial assets and receivables	19		73		26		77
Total	69		176		206		483

Impairment charges on financial assets, excluding receivables, from:
Shares	3		2		15		10
Debt securities and money market instruments	24		61		153		345
Loans	44		43		80		99
Other	-		-		1		6
Investments in associates	1		1		1		1
Total	72		107		250		461

Impairment reversals on financial assets, excluding receivables, from:
Debt securities and money market instruments	(20	)	(2	)	(54	)	(48	)
Loans	(2	)	(2	)	(16	)	(7	)

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